Regulation and Compliance State Regulation

LTCI Watch: Awareness

Commentary October 17, 2014 at 12:42 PM
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These days, consumers who are trying to protect themselves against the risk of big long-term care (LTC) bills are more likely than they were in the past to use life insurance or annuity products to fund their plans.

Some veterans in the stand-alone long-term care insurance (LTCI) market strongly prefer stand-alone LTCI over life-LTC hybrids and annuity-LTC hybrids, but insurers have found stand-alone LTCI to be complicated to write.

Unfortunately, the rules governing a really nice, useful tradition that sprang out of the stand-alone LTCI community — a strong focus on educating consumers about the need to plan for LTC costs — may have fallen behind the times.

Marvin Feldman, the president of Life Happens, said recently that his group has had a hard time lining up insurer support for LTC awareness campaigns, in part because insurers without stand-alone LTCI products are not sure how states would view a hybrid issuer's participation in a nonprofit LTC awareness outreach campaign, even if no campaign materials mentioned specific types of LTC planning products. Even the possibility that an insurer might have to submit the campaign materials to a state materials review process could make sponsoring a campaign too much of a headache for some insurers to consider.

It could be that those companies are simply using compliance questions as an excuse not to have to help sponsor another awareness campaign, but, if companies really would like to sponsor awareness campaigns, and state compliance conflicts really are problem, here's a proposal for solving the problem:

  • Find the toughest marketing materials reviewer in the state with the toughest, most idiosyncratic LTCI marketing rules.
  • Ask someone in that state, or at the U.S. Department of Health and Human Services (HHS), to help work with an awareness campaign development firm to come up with materials that can appeal both to skeptical marketing material reviewers and to consumers. 
  • Persuade all states to agree to launch a packaged awareness campaign materials program and offer it to the first nonprofit group, or consortium of nonprofit groups, that wants to use the materials.

That way, states and the federal government could get help with educating the public about the need for LTC planning at a relatively low cost, and would-be awareness campaign organizers could cosponsor the campaigns without worrying about having to jump through expensive, time-consuming materials review hoops.

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